tv Bloomberg Technology Bloomberg November 16, 2017 11:00pm-12:00am EST
♪ alisa: i am alisa parenti in new york and you are watching "bloomberg technology." house republicans passed their version of legislation to overhaul the u.s. tax code, by slashing the corporate tax rate, lowering tax burdens for most individuals, and adding one point four dollars trillion to the annual deficit over the next decade. the senate continues its debate for a separate plan. it is not clear if the chamber will have enough votes to tax -- the passive. briberyrobert menendez' trial has ended. they were deadlocked. the panel told the judge monday they cannot reach a unanimous -- 18t on any of the end
counts of the indictment against the menendez. toy have the opportunity retry the men. the trump administration is considering having mick mulvaney serve as interim head of the consumer financial protection bureau. that is according to people familiar with the matter. would stepced he down from the post later this month under a federal vacancies law. the president can replace an outgoing director temporarily from another person who has already won senate approval. global news 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. i am alisa parenti, this is bloomberg. "bloomberg technology is next. ♪ emily: i am emily chang and this
is "bloomberg technology." coming up, u.s. tax reform clears a big hurdle as the house passes its version of the bill. we will discuss what comes next and what it means for tech from big caps the startups. plus, inside google's fake news fight. how they are combating the rise of fake stories during breaking news. and, what is behind the spike in tech ipo's in asia. another company makes a debut this week, surging more than 30%. but first, to our lede. lawmakers in the u.s. house of representatives have passed their version of the u.s. tax code. the bill slashes the corporate tax rate while adding an estimated $1.4 trillion to the federal deficit over the next decade. 5, with 13as 227-20 republicans voting against. but they are not done. the senate is preparing its own version of the bill one that , would delay the corporate tax cut for a year. joining me now, we have our
bloomberg tax reporter and in new york david kirkpatrick. who are the winners and losers? >> in this bill, corporations will see a huge tax cut. they will see their rate go from 35% down to 20%. passed through businesses, smaller businesses like startups and mom-and-pop shops see a tax rate cut. but it is a little bit more confusing. they get a certain amount of profit that 25%, and others that individual income rates. companies that are really excited about this. it moves toward a territorial system which means companies are not taxed as much on their profits overseas. apple being one company known for keeping a lot of cash overseas. they can bring that cash back, but they still have to pay a 14%
tax on it. the senate bill has a lower version. folks are seeing if the rate can come down as it goes forward. on the loser side, this is where things are up in the air. the house bill doesn't do this, but the senate bill does. it is something we are likely to see go forward individual rate , cuts are temporary. they only stay in place they , expire in 2026. that is the same for the past through businesses, the startups mom-and-pop shops. , people are watching to see if there could be some extension there. that is looking difficult, giving -- given the tight restrictions. emily: we were talking earlier this week about a provision in the bill that would have not been good for startup employees. that is out and generally, text -- tech got everything they wanted. >> a good day so far. the senate bill still has to be done, but it is a good day for tech. if you look at the big picture, it is great for corporations, not so good for middle-class individuals.
the specific stock-option -- they were going to tax them much earlier. now in the senate bill, they say based on the current system, you will get seven more years rather than paid up front. that is a nice win. emily: we also saw changes that are good for vc's. >> yes. there is a debate about carried interest, way to tax these funds. basically, the new rule is a three-year thing. you have to hold your investments for three years. emily: what is your take? i've been talking to a lot of tech executives who are skeptical that tax reform will happen at all. david it is funny, because we : used to hear about tax simplification. however if you are big tech , company, the combination of a lower corporate tax rate and to
repatriate overseas is an one-two12 punch -- punch. that is really good for big companies. whether they should get that treatment, given the way they are reviewed, is an interesting question. but certainly the win over option treatment is a big deal for the entire innovation economy of the united states. if that had gone through earlier we would have been in a , crisis for entrepreneurs and startups. as well as for established companies. talk about the process, what happens next? what is the likelihood that any of this becomes law? >> the next step is the senate is working to approve the bill in committee. they're looking to vote on the week after thanksgiving, sometime in the first couple days in december. then the house has to sit down
and conference the bill. figure out meshing the two together. if history is an indication, it will look more like the senate bill versus the house bill. they will go back to the chambers and vote on it. there are a lot of things that could trip the bill up. it could be the inclusion of the individual mandate repeal. several senators are concerned. susan collins, john mccain, lisa murkowski -- the folks that voted against obamacare appeal back in the summertime. there is a chance this gets done by the end of the year. so far, republicans have been keeping things moving. it is not a done deal and there are still several steps to go. emily: when you look at the senate bill, what do you see for -- aside for startups and for employees -- that could be good or bad for tech? >> i think one of the interesting things is basically
attacks when a big, multi- corporation pays subsidiaries. that is a big tool for these loweringanies use for international tax bills. that is being done away with. that is another great thing. even though these companies have according -- hoarding their money overseas in effect, they , don't pay the 35% tax anyway. some of these tax planning tools will be there. say the majority of these provisions as they are get past. we have said they are good for the big tech companies. how does that impact the innovation economy? on it is mostly balance it is mostly, based on what i heard neutral. , you could argue that one thing that might be good is if these
big companies like apple, who have $250 billion, would bring it home what would they do with , it? they might invest in more startups or research and development. which our country desperately needs more of. i would say i would bet if there's any general trend, it is positive for the innovation economy. emily: there you see tim cook shaking hands with people buying the iphone x. it would be good for apple with that $250 billion overseas. thanks so much. ireland is set to miss a deadline in the appeal over apple's taxes and the european commission. the irish debt office was supposed to award contracts to custodians and investment managers for the estimated $15 billion in back taxes that the country has been ordered to collect from the iphone maker. but they have yet to do so. last year, the european commission slapped apple with a tax bill for as much as 13 billion euros.
the commission also sued ireland in october for failing to collect the taxes. -- the taxes quickly enough. coming up, fake news. comment on twitter, facebook and google. how it changed to google's algorithm. bloomberg technology's life on twitter, check us out weekdays 5:00 p.m. in new york, 2:00 in san francisco. this is bloomberg. ♪
notice. this includes for content that incites hate and harassment of others. this comes after twitter took heat for verifying the count of someone who orchestrated the white supremacy march last august. they are reviewing current verified accounts and making sure they meet guidelines for behavior. the tech world loves talking about its unicorns, startups that reach the $1 billion value mark. did you know there is such thing -- such a thing as an evil unicorn? it has nothing to do with the company's value. it is a term coined by engineers about unverified posts. after the las vegas shooting, the deadliest in u.s. history, googled top story promoted a story that wrongly identified the shooter. fake news like this may be exploiting a weakness at the core of google's algorithm. here to explain, mark bergen,
who covers google and alphabet. and still with us, david kirkpatrick of techonomy. what is the actual problem here? mark: for google, it is similar to spam, we talked to sundar pichai, he said it was a search quality issue. evil unicorn is a term that google came up with. you have a post that should not exist. it is triggered by a long tail of obscure keywords. an example, something like child vaccinations. a lot of authoritative sources not vaccinate, and conspiracy theories go to the top. with breaking news there is not a lot of information. so trolls have been able to exploit the system. earlier this month, we saw
it around the shooting in texas where they spread lies and misinformation. emily: explained was how google's algorithm will make you -- can make fake news spread faster. mark: in recent years, google has shifted toward fresh and timely content. two years ago they cut a deal with twitter to surface tweets on top of search results. and youtube's algorithms have started to prioritize fresh content. when there is a big event, they -- and there are a lot of people chan orst on reddit or 4 youtube videos. as are filled with misinformation. because there is a dearth of information, they go to the top because they are timely and relevant. emily: what is your take on how google may have inadvertently made the fake news problem bigger? david: the bigger question is,
now society relies heavily on a limited number of places for their information -- facebook google and twitter -- we don't really know how to interpret or govern these systems. i think mark's story about what google is doing is really important and fascinating and detailed. but i come away from it really concerned that there is not a solution in sight. the good part is google seems concerned about it. they're talking about it candidly. they clearly want to do the right thing, but it is not clear what the right thing to do is. they don't want to suppress all the information because many of the sites after an emergency or a news event are legitimate and we want to see that and how do -- to filter through that is a tough challenge. emily: so, what is google doing ? and is it going to work? mark: -- emily: so what is google doing
and is it going to work? david: every time there is verified news, it is pulled away from the longer-term search queries. an example they gave me, if you're a fan of a hip-hop artist that is marginal and you are looking for their latest album, you will probably not find it in mainstream publications. it will be buried. it is a legitimate concern. another concern, it is a philosophical question. do we want google and facebook to be the arbiters of what is news and what is newsworthy? this whole political mess they are trying to avoid. emily: there's all this talk about the rise of machine learning, but will this just make the problem worse? mark: in an interview last month, we said our adversaries are going to use machine learning too.
we have not seen evidence of that. but this is irony where google and tech companies are pushing to make machine learning more acceptable. we might see trolls and bad actors using it. that is the rationale google might use. it is like spam, a cat and mouse game. they want to stamp out these actors as quickly as possible. these are problem on news and youtube. there was an incredible media piece on what is happening on youtube kids. users have found a way to game the system and get content on their you probably don't want to -- want your kids watching. what is the responsibility of youtube? >> has mark noted, we want the content to be more responsibly presented and we want some kind of authenticity to be appropriately represented on all these services, but we don't want the companies to be in the
role of gatekeepers. my own opinion is ultimately they will have to become that anyway. the children's content on youtube kids -- these are people who are gaming the system out of some perverse desire to torment children and -- emily: or make money. isn't it about clicks? david: i guess it is. it is really disturbing. they are exploiting a system that is just there for exploitation. and i believe that machine learning is going to be applied by all parties in these cat and mouse games. in everything these days on the internet it is really an arms , race between the good people and bad people. amazon will make artificial intelligence tools available by the hour themselves. i don't know what the answer is,
the directors are doing the best job they can trying to put many of the disjointed pieces together, but it is quite complicated. i doubt whether the current plan will be successful for very long. emily: the studio was rocked by accusations of sexual harassment and assault against its former head, harvey weinstein. tesla set to announce an all electric heavy-duty truck with autonomous technology. ceo elon musk tweeting about the unveiling, saying this will blow your mind clear out of your skull and into an alternate dimension. joining us now from detroit, jamie butters. do you buy it? you always muska have to take the enthusiasm with a grain of salt. he sets incredibly ambitious
targets, impossibly ambitious, seemingly. he gets thereimes eventually. maybe not when he expects to. maybe this will be another one one. of the things he excels at is getting people excited about the potential of new technology. so the stage is set. let's see what he has got. emily: what do you think of the potential of this truck as a business? jamie: it will be exciting because there will be interesting technology and the challenge of making an electric truck is profound. could be a $2 billion business, $2 billion in revenue. tesla is running about $10 billion a year at this pace. that could be another nice revenue stream. have potential to be bigger than that in terms of changing the way trucking works.
it is a very efficient use of diesel, but it is still using diesel. it creates smog. this can clean up the air and be a great way to deploy the autonomous technology, self driving vehicles on nice highways is a great fit. emily: some analysts are not interested. one says this is distracting from what tesla's primary focus should be. how do you respond to that? jamie: i can't say he's wrong. the absolute make or break model for tesla is the model 3. thereis great concern as often is with a elon musk. he has so many businesses going on. the regular tesla, solarcity, this boring company, there's so much going on that adding a truck is one thing too many. it is a bit of a distraction, but if they can figure out the
bottlenecks on the model three, a lot of those solutions feed into what is going to be needed for making a truck. i think he is right. they have got to get the model 3 right, but it could be beneficial anyway. emily: are we expecting any surprises tonight? what will you be watching for? do we even know how much we don't know about this truck? made,s it going to get where mighty get made, and how many? if he gives an idea of how big he sees this business being then , we can dig into other details like the range, charging infrastructure going to be? when you look at the way big trucks are used, it is hundreds and hundreds of miles. much more than a model s can go. emily: all right, jamie butters in detroit. thanks so much. coming up, and indian startup in the midst of a downturn.
>> 12:30 here in hong kong, i have an update of the top stories. as ringgit strengthen malaysia posted third-quarter gdp figures that beat expectations. it came in a 6.2%, topping the previous quarter. and well ahead of economist forecast of 5.8%. it was malaysia's fastest growth rate in more than three years. the rupee jumped as moody's india,its insights on saying it will over time enhance growth potential. they raised their ratings. and change the outlook to stable from positive. >> it is a combination of these
measures and reforms. they are measures in broadening the tech space, demonetization, measures addressed at improving the business environment. -- ansan is to have a official report on that emissions scandal. an uncertified check has been going on since 1979. nikkei news said nissan executives may return part of their pay amid the follow-up from the scandal. them -- theamong ceo is among them. global news 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. let's check on how markets have been trading, here is sophie kamaruddin. sophie: it is shaping up to be a happy friday, asian stocks extending the rally. shares in manila and india leading the gains.
climbing a second day while the when moody's upgraded the rating. is under pressure even as the senate finance committee removed one hurdle for trump's tax reform plan. the ringgit is the second-best performer in asia this month, up 0.33%. first place goes to the korean won. earlylly may be in the stages. ,aking a look at g #btv 1656 you can see the won's appreciation has been picking up over the past couple months. this has led authorities to discuss the appreciation is far too fast for its liking. rate hike expectations are supporting the ascent. they see an increase at the bok's policy meeting. 7070, the cost to insure
default has fallen to the lowest level in three months. we are counting down to the reopen in hong kong and china the top of the hour. this is bloomberg. ♪ this is "bloomberg technology," i am emily chang. venture capital based out of mumbai, india is launching its biggest firm to date every they will have a tech heavy focus, including robotics, ai, br, and more. at a time when vc funding and india startups is dropping for the third consecutive year. still with us from new york, david kirkpatrick. techonomy ceo of. also with me in the studio a , managing partner from bloom ventures. the indian tech scene is exciting but very challenging. what do you think are the biggest opportunities and the
biggest hurdles? >> the biggest opportunities, for the first time in 10 years, it is a lot of digital infrastructure. it was in the works for eight or 10 years. partly the biggest conglomerate is the alliance group. they have done this ambitious 4g.thet of unrolled a premium plan of data services. we have people from just five years ago at 4g speed for less than $10 per month. when you look at the digital infrastructure paradigm, it shifted dramatically over the last year or two coup. that is a huge opportunity for the small business economy in india. emily: what about the challenges? >> physical infrastructures are still terrible, still behind. the ease of doing business is better come up the government is trying hard.
a fairly progressive market. the exit map is still challenging. the indian market is stringent it willtions and ipo's, be difficult for venture capital to prove we can bit -- we can build massive unicom. emily: according to the numbers we have come a this year no more than 1000 significant startups, down from 6000 last year. what does that mean? karthik: even adjusting for data differences, that is still a dramatic drop. i think it is a new cycle in india. it was built on a lot of big and 2012.en 2005 suddenly when softbank and others saw multibillion-dollar valuations, there was a surge of tech in the market.
it is evolving in a funny fashion. it became very wide at the top and it was little guys writing checks. everyone realized it was not a short-term gain. everyone is either stuck with liquidity problems or waiting and watching on the portfolio. but the portfolio is not moving down the chute. we have seen this happen in china. the cycles play out. emily: david, you have done business in india. we see companies like amazon getting a lot more serious about india apple as well. ,what d.c. when you look at the 360 degree view? karthik: long-term is the key point. if you have a long-term view i , don't see how you couldn't be
super excited about entrepreneurship and technology in india. 300 million people with smartphones already and getting this inexpensive content. one billion people still to go and not only that, this identity system has basically rolled out to a very large percentage of the population. it will allow all sorts of interesting new services to be launched. there's really no part of the economy that cannot be improved by digitization. i think the inferiority of the infrastructure now may make the opportunity for some leapfrog opportunities if people have good ideas, which i'm confident they can come up with. i would be excited, and clearly, he is. emily: there is competition, alibaba, flipkart. what is the competition for amazon? david: it is a long-term game for them. the secondary market in china is shut out for them.
it is going to take a long time before they make a lot of profits. it is competitive, a value conscious economy. i think you're looking at six or years out. seventhey are willing to spend the money because they have big pockets. it is not surprising that softbank and alibaba discovered that. softbank's backing flipkart, saying chinese and the big japanese investor, which is been built by the liquidity out of alibaba in the first place, these of the two coup big investors. we can stand up to the big american giants. you will see that in uber, as well. everyone is fighting uber in india. if you go past these, i don't think there are other large american companies yet.
that is because there's a lot of complexity, so they might start acquiring businesses. whatsapp, facebook and google being dominant. that is probably because of the -- because it is an english-speaking country. what do think the impact will be of the trump administration's attempt to curb h-1b's? in this industry come from india. i think boththik: the education applications and work applications have dropped off this year. there is little fear of retribution. they are trying to be more entrepreneurial are joined more startups or get them back in india. showdea is to hopefully enough attractive opportunities
to come back to india. i think it is net positive. the summit is in hyderabad, india. i think they recognize there is an opportunity which they should not lose. they should still bring in talent here. we are doing that from our company called bloomberg. we are still trying to say we could come as new founders, maybe later in the game. fascinating, thank you so much. david kirkpatrick, you're sticking with us. spotify is doubling down on its presence in london. the streaming music giant is moving to a new london office and plans to literally double its workforce in the next two years. close toffice will be london's famed trafalgar square and has employees working on
engineering, data and machine learning -- this appears to be another post-brexit vote of confidence from tech firms. facebook, snapping google have announced plans to increase hiring in the u.k. reports of a new mega media deal. what we know about comcast interest in 21st century fox's properties next. this is bloomberg. ♪
the parties continue to discuss mitigation opportunities. and 21st century fox shares are popping after as much as 8%. hours,comcast has approached the company to express interest in acquiring a big portion of its film and tv assets after talks between disney and 21st century cooled. joining us is david kirkpatrick and also from l.a. who covers 21st century fox. we were just talking about this yesterday. the talk with disney it sounds like have been shelved. tell us what you know about comcast. >> it seems like a very fluid situation in that comcast has been kicking the tires. as people like to say. some interest in these assets of 21st entry fox and it is also unclear of the situation with
disney. there could be suggestion they might be interested as last time we reported, things -- it is interesting because just yesterday at the annual general meeting they were talking about how they had a strategy to compete with not only media companies, but also tech companies. really doubling down and investing in assets. that has paid off, really showing in the last quarter they were able to get a good increase in the revenue. they have some of the most popular tv shows showing on like "this is us," which shows on combat -- comcast. it makes some sense. emily: there are so much happening in the original content arena. netflix and amazon already
investing billions of dollars. 21st century fox is an interesting position. david: there is clearly an idea in business generally that you have to consolidate business distribution and content with verizon, at&t and time warner so this is in line with that. comcast has been buying more content and clearly knows how to use it and deploy it on its distribution. it is surprising if you think about it how we see on the one , hand this extraordinary enthusiasm for the internet giants and the revenues and yet, these companies see an attempt -- they have an idea they can build an alternative center of gravity. in each case they want to be much bigger. emily: what would a comcast bring to the table that disney would not? anousha: comcast has made a
great effort in turning around the businesses it has acquired such as nbc universal. it has been able to take many of tv properties and really maximize the revenue out of them and that is what we hoped they would do with the fox assets. so in a way, they would really be combining two of the most powerful entities in hollywood when it comes to movie content. the other area, which may be different from disney's approach in sports, there is a lack of clarity around what each of these parties want. could there be more interest from comcast on the sports side? it is unclear. that is one area that is different between the two of them. fox is clearly benefiting from the interest with their stock price. something i raised yesterday, fox had been frustrated by the discount at which its shares trade.
while it makes sense financially, investors have this question of why the murdoch family would want to sell these crown jewels right now. emily: on that note, because things are happening in the offers are being entertained, does it make you more convinced they want to sell? anousha: the fact they have entered into the conversations, why would you strategically have these conversations if you are not really thinking about it? there were lots of m&a conspiracy theories about what this could mean for their business. does it mean they are less committed if they can get the sky deal done? people i spoke with said that is not really the case because there has not been more information and fox has said they think it will close next year.
i think there has to be consolidation in order to drive to consolidation. look at the movie studios, there are six of them. three of them, fox, sony and paramount, are not doing great. and the others are pulling away and becoming super major studios. to share pricet and maybe there is a strategic boost if the sky deal does not work out and there is something else they could do. they could concentrate on news and sports instead. emily: thank you. david kirkpatrick, thank you for joining us. coming up, the asian tech ipo market is white-hot. we will hear from a company that made its debut this week. this is bloomberg. ♪
emily: baidu is jumping into the smart speaker market with the raven h. it cost about two to the chinese $50. tech giant also announced updates to its mobile app to more closely integrate news with search results. yixin jumped the latest , eye-popping view in a hong kong stock market grip by tech fever.
the ceo spoke to stephen engle about the companies linked to the tech giant tencent. >> we are backed by tencent with a very -- many different paths. accounts, user traffic. risk management. very different facets. i think it is -- rather than just the stock market. emily: our bloomberg correspondent joins us from hong kong. yixin made a big splash, what is behind interest? backeds that tencent moniker before the name yixin. i was there and there was four other ipo's. this was not the largest. tencent,t is linked to
i think tencent affiliates own 21% of this company. it is in a sector that is booming right now in the auto financing, auto insurance, auto leasing. and they provide that online. they are only a three-year-old company. i remember when i bought my car in china in 2010, the financing availability was very limited. you had to go in with cash for a car. they tapped into this new rising middle class in china. this is what the ceo told me about how they plan to triple the number of cars they offer for leasing in those china markets. because of the price we are operating on, it is more than half a million. we are looking to adding on another million more in terms of vehicles. they will use proceeds to boost marketing. they are integrated into tencent's wechat.
but they already have tenpay built in. emily: has that changed? >> it is changing because hong offered a bigally steak on the enterprises the , banks and construction companies. as of late, there has been lackluster demand. now we are starting to see some of the tech companies and companies that respond across the border here. you are seeing more interest and keep in mind, this is a heavily retail driven market. a lot of mom-and-pop -- this particular branch was oversubscribed. china literature, which is a kindle-like service from tencent, it was more than 600
times oversubscribed. there are a lot of the retail investors saying, we have to get left behind. there is a herd mentality going on here. emily: all right, stephen engle in hong kong for us. thank you as always for something by. that does it for this edition of "bloomberg technology." on friday show we will talk about google, ai and economist cars. and a reminder, we are live streaming on twitter. check us out. that is all for now. this is bloomberg. ♪ retail.
under pressure like never before. and it's connected technology that's moving companies forward fast. e-commerce. real time inventory. virtual changing rooms. that's why retailers rely on comcast business to deliver consistent network speed across multiple locations. every corporate office, warehouse and store near or far covered. leaving every competitor, threat and challenge outmaneuvered. comcast business outmaneuver.
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